Could the Microsoft-Salesforce Partnership Signal a Future Acquisition?

The partnership features an integration that will be beneficial for end users and is clearly a win for Salesforce, but experts wonder what the deal means for Microsoft’s future.

Microsoft and customer relationship management (CRM) software company Salesforce.com have entered into a partnership to create new products to connect Salesforce's CRM apps and platform to Microsoft Office and Windows.

In a press release, the companies say they are joining forces "so customers can be more productive."

Insiders, however, say the collaboration could also signal a new direction for Microsoft under chief executive (CEO) Satya Nadella, and could even perhaps point to a future acquisition.

Joint Microsoft-Salesforce offerings will include the Salesforce1 customer platform for Windows and Windows Phone 8.1, which the companies say will enable customers to access Salesforce and run their businesses from Windows devices.

A preview is planned for the fall, with general availability to follow next year, they say.

The companies are also banding together to provide Salesforce for software and services suite Office 365, which the companies say will give customers access to the content they need to collaborate, sell, service, and market from anywhere.

From a user's point of view, Derek Harding, CEO of digital messaging agency Innovyx, says making it easier to use Salesforce from within Office is a good thing and any kind of integration along these lines is beneficial to end users.

However, Harding questions the motivations from each player within the partnership.

He calls the deal a win for Salesforce because "they know most people are working using Word and Outlook to create documents and messaging," but says he is curious about Microsoft's impetus because Microsoft has its own CRM platform, Dynamics.

"It's very un-Microsoft to support a competitor. What a strange thing," Harding says. "I think maybe the new CEO is heralding in a new mindset and approach to integration and partnerships in the cloud and maybe that's a part of it – it's about showing Microsoft change and showing a new partnership model rather than building it all and being a one-stop shop. It's increasingly important to do that. There are a lot of up-and-comers and there is a need to partner and to link and work with others."

Ramon Ray, marketing and technology evangelist at Infusionsoft and Smallbiztechnology.com, agrees that the partnership shows Microsoft's new direction under Nadella is to be more open.

"Microsoft has long been about 'Microsoft only' for the most part. With this new partnership, it's showing that Microsoft will be more open and extensible," Ray says. "Its core two software products – Office (and Office 365) and Windows – are the two most important things Microsoft cares about. This new direction shows Microsoft is willing to partner with all companies to ensure its customers can use Windows and Office across and on all platforms – even seemingly competitive ones."

But Harding also hypothesizes that Microsoft could have been motivated to partner in part to defend its cash cow Office against cloud-based solutions as users move into multiple devices.

Harding also says there could be a long-term play here, noting many large software companies have purchased cloud-based solutions in the last several years and have marketing clouds – including Adobe, Oracle, and IBM – but Microsoft is "oddly missing from that space."

"Maybe they're thinking partnership or maybe acquisition to fill out that capability," Harding says. "It seems like a long shot, but you have to wonder, 'Is that their long-term thinking?' Maybe that's how Microsoft gets a marketing cloud long-term."

Noting the only people who really know the answers are within Microsoft and Salesforce, Harding adds, "Maybe I'm just super cynical and they really want to make it easier for users."

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ABOUT THE AUTHOR

In addition to ClickZ and Search Engine Watch, Lisa's work has appeared in The Huffington Post, The Luxury Spot, LearnVest, MarthaStewart.com, GoodHousekeeping.com, amNewYork, and The Wall Street Journal. She's a graduate of Columbia's School of Journalism.

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